National News

Aldi and Lidl keep up the pressure

Half of households shopped at Aldi or Lidl at least once over the summer as the discounters kept up their pressure on the "big four" supermarkets.

Latest till-roll figures from Kantar Worldpanel reveal that supermarket price inflation fall for the eleventh quarter in a row to stand at 0.2% in the 12 weeks to August 17, leaving overall sales growth at another 10-year low of 0.8%.

Discounters Aldi and Lidl held their record market shares of 4.8% and 3.6% respectively in the period, with 53% of households shopping at either outlet.

Asda was the only one of the big four chains to boost market share, with Tesco and Morrisons remaining under pressure and Sainsbury's suffering a small drop to 16.4% as its sales growth lagged behind the market at 0.3%.

The country's biggest grocer Tesco suffered a 4% sales fall, the largest decline among the big four during the period compared to a year ago. Its market share also fell to 28.8% from 30.2% over 12 months.

Morrisons, which in March pledged to spend £1 billion cutting prices over three years, saw its sales fall 1.9% and its market share slip to 11% from 11.3%.

Kantar Worldpanel director Edward Garner said: "Competitive pricing among the big grocers and deflation in the price of staple items such as vegetables, milk and bread has driven inflation down yet again."

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"This naturally impacts on the overall growth of the grocery market, which has fallen to a 10-year record-low of 0.8%."

Shore Capital analyst Clive Black said the growing high street mix of discount supermarkets, pound shops and cheap eating-out options in pubs and cafes had impacted sales in the major supermarkets.

Mr Black said: "Such a mix is arguably a 'perfect storm' for the big four retailers, which were arguably taking their customers for granted through much of the economic downturn by depending upon inflation for sales and over-protecting gross margins.

"Unfortunately, as we have commented before, the shoppers sussed their trading strategies out and went elsewhere."

Asda, the first of the big four supermarkets to implement a long-term price cutting programme, saw sales lift 1.2%, while its market share edged up to 17.2% from 17.1%.

Mr Garner said: "Asda and Waitrose have achieved growth with differing strategies. Asda has pushed its 'Price Lock' strategy to keep prices on everyday essential items low, while Waitrose is running competitive offers on home delivery alongside offers for myWaitrose card users allied to its overall quality and provenance positioning."

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